Chapter 10 Testbank
1. When part of the cost of an activity falls on people not pursuing the activity, it is call a(n)
A. external benefit.
B. prisoner’s dilemma.
C. negative externality.
D. positive externality.
2. Which of the following is an example of an activity with an external cost?
A. Raising honeybees where neighbors on all sides grow apples
B. Keeping the front yard clean
C. Speeding on the highway
D. Having to buy batteries for the new remote that came with a TV
3. When some fraction of the benefit of an activity is received by people not participating in the activity, it is called a(n)
A. winner’s curse.
B. positive externality.
C. external cost.
D. efficient allocation.
